Financial advisors, also known as personal financial advisors, meet with clients to assess their financial goals and then develop strategies to help meet these goals. Advisors also monitor their clients’ accounts to determine if and when changes are needed. As with any career, there are both pros and cons to being a financial advisor.
Personal financial advisors earned a mean annual salary of $90,820 as of May 2012, according to the U.S. Bureau of Labor Statistics. This was nearly double the average income of $45,790 reported for all occupations. The top 10 percent of financial advisors earned $187,199 a year or more, while the bottom 10 percent earned $32,280 of less. When compared to other financial jobs, this salary is slightly higher than the mean annual wage of $89,410 earned by financial analysts and significantly higher than the $72,100 earned by budget analysts.
The BLS expects employment of personal financial advisors to increase 32 percent from 2010 to 2020, which is much faster than the 14 percent average growth rate predicted for other occupations. Demand will be driven in part by aging baby boomers, who will seek more financial advice as they approach retirement age.
Although demand for financial advisors is growing, competition is steep. The BLS notes that the lucrative salary and relatively few formal educational requirements -- only a bachelor’s degree is needed -- make this a very desirable career field. Almost 25 percent of financial advisors were self-employed as of 2010, so they’re competing with other self-employed advisors as well as with financial firms. To help find clients, many financial advisors must travel to conferences or teach financial classes.
According to the American Institute of CPAs, the many tedious regulatory issues facing the financial services industry is a major turn-off for prospective financial advisors. Among other things, financial advisors must ensure that their advice is not tied to financial compensation from selling a particular product, which would be a conflict of interest. In addition, they must understand complex compliance guidelines related to state registration and regulations, and also adhere to a long list of Securities and Exchange Commission requirements.
- U.S. Bureau of Labor Statistics: May 2012 National Occupational Employment and Wage Estimates
- U.S. Bureau of Labor Statistics: Personal Financial Advisors
- U.S. Bureau of Labor Statistics: Business and Financial Occupations
- American Institute of CPAs: Regulatory
- NBC News: How to Pick a Financial Advisor
- U.S. Bureau of Labor Statistics: Occupational Employment and Wages, Personal Financial Advisors
- Creatas Images/Creatas/Getty Images